Long-term asset creation in Share Market

(मराठी आवृत्ती)

Share market is indeed high-risk area for investment. I have been discussing an idea to create assets in share market with many of my friends (Nakul, Yogesh, Manoj and many). As the saying said, Big things can't be built overnight, similarly asset can not be created in a single day or even in short term. One of the traditional way of creating long term asset is buying a house. In my opinion it is a huge liability, you buy it once and keep paying over a long term (home loan) plus taxes, maintenance and then you get a house. 

Is it possible to create an asset in high-risk area like share market?

If you act smartly, yes it is possible. There are many different ways to do it. One of the way is as below

I bought 30 shares of Asian Paints @1370 Rs. in May 2019. As of Dec 2020, the share reached to Rs. 2770. It is more than 100%. Side note: I am not a good share market investor. Somehow due to strong fundamentals and holding it more than 1 year it gave me these returns. Not all my share decisions were such a good decision. 

I sold 13 shares @2700 in Dec 2020. It gave me back Rs. 35000. In May 2019 I had invested Rs. 34250. The tax and brokerage amount is already adjusted. Now I have left with 12 shares for which I have not paid a single Rupee. These 12 shares has to be locked in the account for next 20 years. This will work like an asset. 

If one can collect such shares in the portfolio, one can definitely create long term asset in share market. 

Few after thoughts

1. Should I not track those shares? 
1. In high risk area, stop-loss is very important. Share market will keep on rising but when to exit from investment is also important. Nothing in share market should be kept with closed eyes. Keep tracking the price. If it falls drastically or fundamentals of company is shattered. simply sell the stocks and get out of it
2. What is the right price to exit?
1. There is no single answer for this. Whenever you say the time is right, get out of it.   

Serverless ??

If you are a software developer then you must have heard "Serverless" word. You might have heard in context with serverless application, serverless architecture, serverless computing, serverless framework, etc.. Let me start with word serverless, it is little distracting compared to literal meaning of serverless. My first impression was serverless means "no server". On 2nd thought, how can an application like a website or a web-service can be serverless. Have they really came up with an idea to go away from server ?? On further reading I realized that serverless means you will not be owning the server but only the code. Serverless do not meant that there is no server but more like someone else's server. But then why to use word serverless, actually i didn't find the reason. They could have used word like "someone else's server" or "Server is not my headache" or "I worry only my code" or any other set of words. May be they are following a strategy "if you can't convince then confuse" and attract an attention. For sometime initially i incorrectly assumed "embedded server" with "serverless".

To make understand easier, let compare the situation with a car production plant. In it we have a  manager (factory incharge), workers which are spread acrosss different skill sets and buyer who buy the car. Comparing this situation with a Web application like shopping website, the factory manager is like a server (Tomcat, WildFly, Weblogic, etc..), back end API + pages are like workers and car buyers are the end users which are buying products from website. For simplicity assume car is built immediately as soon as car buyer places an order same like page is visible to shopper while browsing a website. As car buyer asks for car, factory manager asks worker to start working and starts creating car. In car factory each worker is specialized for a specific car and there are multiple workers available, kind of a queue. As a factory owner i need to keep on paying to factory manager, workers to make sure they are available. Even if there are no buyer, i have to keep them available.

In serverless paradigm below changes will incur.

1. I will take my workers to a place where manager and factory setup is owned by someone else like a mass producer (cloud provider) who will manage my workers and give me car as per need. Similarly I will put my code in cloud provider setup where hardware and server will be provided by cloud provider
2. I will pay to mass producer only for the time my workers are busy and using his setup to produce a car. Similarly I will pay to cloud provider only for the time my code is running on server a span of few milliseconds. For remaining time my workers will be sleeping i.e. code will be idle.  
3. I do not need to maintain a seperate manager and factory setup for my workers. I do not need to maintain server and keep maintaining it, securing it, etc. 

To rip the maximum outcome of this way of working I can make few changes in workers (code).